Singapore Airlines recorded its worst-ever results this financial year, clocking in a $3.2 billion loss. The last 12 months, from 31st March 2020 to 2021, saw passenger traffic fall 97.9% due to border restrictions. Let’s find out more about the airline’s results for the last year and its future plans for recovery.
Tough year
While nobody expected 2020 to be a good year for a hub airline like Singapore Airlines (SIA), the losses will sting. The carrier lost a huge S$4.3 billion ($3.2bn) as revenues shrank by 76% and traffic all but dried up. By the end of March 2020, the pandemic had firmly taken hold globally, slamming borders shut.
On the passenger side, numbers were down a massive 97.9% in terms of revenue passenger kilometers. This is largely due to Singapore’s border being closed to all non-essential travel and connecting traffic in the region remaining fairly low. However, not all the losses were due to operations alone.
Aside from operations, SIA lost a whopping S$1.73 billion ($1.3 billion) in retiring 45 aircraft earlier than scheduled (non-cash loss). This included seven Airbus A380s, four 777-200ERs, four 777-300ERs, eight 737-800s, several A330s, and dozens of others.
Overall, the carrier is left with 162 passenger jets and seven freighters in its fleet. The fleet has also been streamlined to include newer, more efficient aircraft. The A350s and 787s have taken the front seat, being deployed on most medium- and long-haul routes.
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Looking ahead
Perhaps the only bright spot in the deep red was Singapore Airlines’ cargo business. Freight revenues rose by an impressive 38.8% to S$2.7 billion ($2bn), slightly offsetting the losses on the passenger side. However, despite the worst year on record, SIA is more optimistic about 2021.
As vaccines roll out in Singapore and across the world, the flag carrier is hoping to slowly see traffic tick up and destinations return. While the island nation is likely to be more cautious with its own reopening, connecting traffic could begin to pick up in the coming months. Destinations like North America and Europe both expect to see more travelers are restrictions ease.
Despite the virus flaring up in parts of the world, Singapore is planning to return its A380s to service this winter. While the carrier will operate less than 2,000 flights, the return of the superjumbo is a positive sign.
To weather the continuing storm, Singapore Airlines plans to raise S$6.2 billion ($4.6 billion) through convertible bonds. This will ensure the carrier has enough capital to weather the next year and come out on the other side.
Another bad year
While Singapore Airlines is hoping to avoid another tough year, things remain shaky for now. The long-awaited Hong Kong travel bubble was postponed again this week due to a rise in cases in Singapore this time around. With COVID-zero still being the goal, opportunities remained limited for Singapore Airlines to ramp up its schedule.
However, with vaccines proving extremely effective for now, perhaps a sustained recovery has begun for the airline.
What do you think about the future of Singapore Airlines? Let us know in the comments!